Agreed. It's normal. Strange to think what guys get up to when not in big groups and not observed by females.
I'll normally give another guy a nod or make eye contact, and if he says "hey" I'll give him a "hey" back again. Nothing weird about that. Like others have stated, it's more of a "I'm not being rude and ignoring you and I'm not looking for a fight either; I'm just a regular dude like you" kind of thing.
I make sure I avoid looking at passing females though, because I don't want them to feel threatened in any way by some strange guy on the street. They always seem to reciprocate and look straight ahead too. If a female makes eye contact with me, I'll give her a quick smile to be polite.
Most guys seem to have their preferred or "go to" casual greeting. For me, it's "hey", sometimes just a quick nod. For some others, it's "alright", others a little more elaborate with a multiword greeting like "how's it going" or "'sup dude", that kind of thing. Pick one and stick with it, get comfortable with it, but don't go over the top with something like "hey my man, how's it going?" That may have worked in the 1970s, but today's male is far more concise. Makes life so much easier.